Buying vs Renting

This is a big decision, based on so many factors. Most individuals and families make this decision simply based on what they can afford right now—without considering some longer-term aspects.

Usually the biggest factor in determining whether to rent or buy is the upfront cost: the down payment required to purchase a home, which is usually 20%. This often turns a lot of potential buyers away.

However, you can purchase a home with less than a 20% down payment. You might qualify for certain loan programs that do not require large down payments.

Additionally, you may qualify for a loan without the 20% down payment, as long as you pay for private mortgage insurance. (PMI).

In general, if you plan on staying in the home for a longer period of time, it’s a good idea to buy, The upfront costs may be higher, but you build equity.

Buying

Advantages

• -Builds equity and strengthens credit
• -No landlord
• -More stability, joining a community
• -Possible tax benefits
• -Can make improvements or upgrades to the property

Disadvantages

• -Requires substantial money (the down payment) up front
• -Could lose money if the home’s value declines
• -More stability, joining a community
• -Extra expenses beyond mortgage payments, including mortgage insurance, taxes, and HOA fees
• -Responsible for all repairs and remodeling

Renting

Advantages

• -Fewer upfront costs and paperwork
• -More freedom and mobility
• -Not responsible for maintenance, repairs
• -No need to worry about falling home values
• -No property taxes

Disadvantages

• -Landlord can raise rent or sell the property
• -Choices may be limited depending on vacancies
• -Might have to move multiple times
• -Does not build equity or provide tax benefits
• -Cannot make structural changes to the property